Money is an imaginary concept, but humanity is enslaved by it

[Erdogan]

You want to discuss diminishing marginal utility, which is okay. It is a stretch to use that meme in regard to money, since they have [it has] no direct utility, but I guess you could apply it to value itself if it is large enough, except it does not seem to work that way in practice. The very rich seem to be just as eager to keep and expand their wealth as a poor one. Anyway it does not touch the problem of money value being real, or representing what you migh get for the money. Ah...It seems this was your point. Ok I get it. Money value does not seem to diminish, therefore there is a fundamental difference. I am ok with that, except that the money value is not therefore in any way unreal, or representing something else. The difference is just the exchange value contra the direct use value, general value contra the more specific. Maybe we are mostly in agreement.

Money has "direct" utility (note that I am double-quoting the word direct, since it makes no sense), which I explained earlier. And exactly towards this utility I was suggesting to apply the law of diminishing marginal utility. As i said, I don't think that the utility of money ("direct use value") abides by this law, but I haven't given this idea much thought myself. In fact, I was hoping that someone would pick it up and give us a proof (or a rebuttal) that I would just agree with...

I'm using your terminology but it is superfluous and only further confuses things ("direct use value", "exchange value", and the like)

Here we go again. How can it be possible for money to have direct utility, when you have in detail described what direct utility is ("something that you can eat, figuratively speaking"). How can direct not be a useful word. Either you can utilize the money directly, or you have to make a trade before you can utilize the value? The trade is the limit between the direct and indirect utility.  Indirect utility -> trade -> direct utility. You transform the indirect value of the money to something useful using a trade.

Once again, there is no direct or indirect value, no direct or indirect utility. All utility is "direct" by definition, and money has such, though not in exchange where it just represents value (utility) of things that can be bought with it. These are the words that you use, not me. I just repeat them after you in an effort to explain things in your terms, and then you are trying to blame me for using them. Obviously, you are blaming the wrong person. Why are you so eagerly trying to obfuscate matters?

Trying again: A possible test for direct and indirect, is when you are stuck alone on an island with no hope ever of seing another human being. You have a sack of potatoes, a hammer, a bunch of dollar notes, some bitcoins (no internet, ever), the winter is coming and your hope of survival into old age is slim, but present. What has value of those things to you now? When you can not trade, now or in the future, only the direct use value is left.

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[deisik]

Trying again: A possible test for direct and indirect, is when you are stuck alone on an island with no hope ever of seing another human being. You have a sack of potatoes, a hammer, a bunch of dollar notes, some bitcoins (no internet, ever), the winter is coming and your hope of survival into old age is slim, but present. What has value of those things to you now? When you can not trade, now or in the future, only the direct use value is left.

Your (or mine, for that matter) subjective valuation of things does depend on the circumstances, the word itself tells it all. In fact, the notion of marginal utility is based entirely on that, i.e. external conditions, right here right now. In the situation of a lonely island the utility of potatoes will indeed be higher than that of bitcoins (the utility of the latter will evidently be next to nothing). Why are you still trying to put me into your system of thinking? How many times should I repeat that I don't use these notions (direct and indirect use values), they are pretty much meaningless to me (though I understand what you mean). I consider them only confusing things, not clarifying them...

Strictly speaking, this state of matters (a single individual on a desolate island) is beyond the scope of economics as a science altogether, but the notion of subjective valuation (marginal utility) is still fully applicable here

[johnyj]

You could just say that the money has no value by itself, and the money an individual has represents the amount of goods that he can have. Thereby you can exclude money out of the equation completely and would lose almost nothing from the picture. If we consider value as utility, then money has some utility to us by and of itself, since it gives us the possibility to choose what to buy (and what not) as well as postpone buying altogether. Whether this utility abides by the law of diminishing marginal utility (i.e. diminishes with the amount of money an individual has) remains to be seen...

Personally, I don't think that it does, therefore there is room for doubt about the nature of this utility

I think it does, but since money can purchase almost everything, and human's demand are so many, you are actually asking wether diminishing marginal utility applies to all the human's demand added together. That is much more complicated than asking the same question for a single utility like bread or milk

You didn't understand my point. I am not talking about people's unlimited demands or their needs. I mean the utility of money over barter (i.e. not the utility of things that can be bought with money). With barter you don't have as many options as with money. What you have for exchange may quickly deteriorate, other people may not be interested in that, you can't postpone consumption, and so on...

In this way money is not an abstract imaginary concept in the sense it is meant in this topic

Ok, I guess you mean the utility of enable transaction. Money indeed brings much more convenience than barter, but I think that the utility of transaction itself does not have any value, since it is some kind of knowledge. When it is discovered, it become free for everyone to use, it can be duplicated endlessly, you just need to find enough people to agree on one or several transaction medium

If you are living in a total barter society, the invention of money will increase the commercial activities a lot, thus bring great value. But in today's society, when the technology is already available, more types of money will not create more value (That's definitely diminishing marginal utility). Fiat money has lost the ability to store value in a relatively long time, thus some other type of money like bitcoin might come to replace its place in this specific area. But overall there are only 2 utilities of money: Enable universal transaction and maintain purchasing power for a long time

[Erdogan]

Trying again: A possible test for direct and indirect, is when you are stuck alone on an island with no hope ever of seing another human being. You have a sack of potatoes, a hammer, a bunch of dollar notes, some bitcoins (no internet, ever), the winter is coming and your hope of survival into old age is slim, but present. What has value of those things to you now? When you can not trade, now or in the future, only the direct use value is left.

Your (or mine, for that matter) subjective valuation of things does depend on the circumstances, the word itself tells it all. In fact, the notion of marginal utility is based entirely on that, i.e. external conditions, right here right now. In the situation of a lonely island the utility of potatoes will indeed be higher than that of bitcoins (the utility of the latter will evidently be next to nothing). Why are you still trying to put me into your system of thinking? How many times should I repeat that I don't use these notions (direct and indirect use values), they are pretty much meaningless to me (though I understand what you mean). I consider them only confusing things, not clarifying them...

Strictly speaking, this state of matters (a single individual on a desolate island) is beyond the scope of economics as a science altogether, but the notion of subjective valuation (marginal utility) is still fully applicable here

Unable to discuss.

[deisik]

You didn't understand my point. I am not talking about people's unlimited demands or their needs. I mean the utility of money over barter (i.e. not the utility of things that can be bought with money). With barter you don't have as many options as with money. What you have for exchange may quickly deteriorate, other people may not be interested in that, you can't postpone consumption, and so on...

In this way money is not an abstract imaginary concept in the sense it is meant in this topic

Ok, I guess you mean the utility of enable transaction. Money indeed brings much more convenience than barter, but I think that the utility of transaction itself does not have any value, since it is some kind of knowledge. When it is discovered, it become free for everyone to use, it can be duplicated endlessly, you just need to find enough people to agree on one or several transaction medium

If you are living in a total barter society, the invention of money will increase the commercial activities a lot, thus bring great value. But in today's society, when the technology is already available, more types of money will not create more value (That's definitely diminishing marginal utility). Fiat money has lost the ability to store value in a relatively long time, thus some other type of money like bitcoin might come to replace its place in this specific area. But overall there are only 2 utilities of money: Enable universal transaction and maintain purchasing power for a long time

So you are essentially saying that the transactional utility of money is nullified (its marginal part), that is, any greater amount of money doesn't add up to it. Okay, this doesn't look contradictory, but this in no case means that the concept of money is useless. It is like saying that the air we breathe is worthless since its marginal utility is zero...

[johnyj]

You didn't understand my point. I am not talking about people's unlimited demands or their needs. I mean the utility of money over barter (i.e. not the utility of things that can be bought with money). With barter you don't have as many options as with money. What you have for exchange may quickly deteriorate, other people may not be interested in that, you can't postpone consumption, and so on...

In this way money is not an abstract imaginary concept in the sense it is meant in this topic

Ok, I guess you mean the utility of enable transaction. Money indeed brings much more convenience than barter, but I think that the utility of transaction itself does not have any value, since it is some kind of knowledge. When it is discovered, it become free for everyone to use, it can be duplicated endlessly, you just need to find enough people to agree on one or several transaction medium

If you are living in a total barter society, the invention of money will increase the commercial activities a lot, thus bring great value. But in today's society, when the technology is already available, more types of money will not create more value (That's definitely diminishing marginal utility). Fiat money has lost the ability to store value in a relatively long time, thus some other type of money like bitcoin might come to replace its place in this specific area. But overall there are only 2 utilities of money: Enable universal transaction and maintain purchasing power for a long time

So you are essentially saying that the transactional utility of money is nullified (its marginal part), that is, any greater amount of money doesn't add up to it. Okay, this doesn't look contradictory, but this in no case means that the concept of money is useless. It is like saying that the air we breathe is worthless since its marginal utility is zero...

Exactly, knowledge is of course useful, and those deep knowledge can still have value due to years of time needed to learn. But the knowledge of enable transaction using money is very simple, almost a known fact

We can also observe this on bitcoin: Bitcoin is an invention that enabled so many things that can not be done before, like anti-copy and electronically transfer ownership without third party, so it has certain great utilities. But the blockchain technology can be widely spread, thus all the alt-coin will be able to enable exactly the same things, and those alt-coins will worth a little, since their marginal utility over bitcoin is minimal

Similarly, since fiat money already exists, most of the people can do transactions with fiat money, bitcoin does not really provide extra benefit in enabling transactions domestically. But it enabled instant international transactions, and long term store of value due to expansionary monetary policy around the world, that is the area it is mostly demanded today

[cjmoles]

Money isn't an "imaginary" concept....It's a very real method of engaging in the exchange of goods and services in the most efficient manner possible.  The vehicle by which that transaction is conducted was never intended to be the most important aspect of the transaction; however, that is exactly what it has become....and well...bitcoin changes things....We have to start re-thinking the concept now.

[ObscureBean]

Money is merely the actualization of the one thing coveted by humans since the dawn of man: power. It serves to reinforce the illusion that power is the defining trait that pervades this entire reality.